TOKYO, March 15 (Reuters) - The British pound paused for breath on Friday but stayed on course for its biggest weekly gain in seven weeks after the UK parliament voted to seek a delay in Britain’s exit from the European Union, following a decision to avert a no-deal Brexit.

The yen was off one-week lows after the Bank of Japan kept its policy on hold and a report that North Korea is considering suspending nuclear talks with the United States.

Sterling last traded at $1.3252, having slipped further from Wednesday’s nine-month high of $1.3380, with its fall of 0.76 percent on Thursday.

But it is up 1.8 percent so far this week, the biggest such gain since late January, supported by relief that Britain will avoid crashing out of the EU without a deal.

Against the euro, the pound retreated to 85.45 pence per euro from Wednesday’s 22-month peak at 84.725.

British lawmakers approved a motion setting out the option to ask the EU for a short delay if parliament can agree on a Brexit deal by March 20, or a longer delay if no deal can be agreed in time.

The pound was mostly steady after the motion was passed late on Thursday.

“There has been a soft consensus in the market that the Brexit will be delayed. Things have been moving in line with that,” said Kyosuke Suzuki, director of forex at Societe Generale.

“But tail risk has not completely disappeared yet. The next week’s EU summit will probably be the climax,” he said, noting the fact that all 27 EU members must approve any extension.

Before UK Prime Minister Theresa May meets EU leaders on Wednesday and Thursday, a new vote on her twice-rejected deal is likely next week.

Lawmakers must now decide whether to back a deal they feel does not offer a clean break from the EU, or reject it and accept that Brexit could be watered down or even thwarted by a long delay.

The yen bounced back from a one-week low of 111.83 per dollar touched on Thursday after Russia’s TASS news agency reported North Korea’s vice foreign minister said the country is considering suspending nuclear talks with the United States.

The yen also had a mild boost as the BOJ kept monetary policy steady. Though it had been expected to stand pat, there are expectations that Governor Haruhiko Kuroda could make a stronger show of its readiness to ease policy further at his news conference at 0630 GMT.

“It would be wise for the BOJ to keep markets believing that way. There is no reason to crush such expectations. Kuroda could express his willingness to ease if needed,” said Shinji Ishimaru, senior analyst at MUFG Bank.

“But on the other hand, it is also true that the market’s take is that there’s little the BOJ can actually do to ease. So his comments may have limited power in boosting the dollar/yen.”

The dollar was broadly weaker after U.S. data on Thursday underscored growing pressure on the U.S. economy and kept the dollar in check.

The number of Americans filing applications for unemployment benefits increased more than expected last week while new home sales fell more than expected in January.

The euro traded at $1.1320, up 0.15 percent.

The Australian dollar gained 0.3 percent to $0.7083.

It was knocked off this week’s high of $0.7098 on Thursday by reports that a possible summit meeting the United States and China to hammer out a trade deal will be delayed.

U.S. Treasury Secretary Steven Mnuchin said on Thursday that a trade summit between President Donald Trump and his Chinese counterpart Xi Jinping would not happen at the end of March as had been previously suggested because there was still more work to do in trade negotiations.

Trump said whether a trade deal can be reached with China would probably be known in the next three or four weeks.

Win Thin, global head of currency strategy at Brown Brothers Harriman, said he expects a compromise to be reached sometime early in the second quarter.

“I think there is heat on both China and the U.S. to get a compromise, but it’s not going to be some kind of big game- changing thing,” said Thin. (Additional reporting by Daniel Leussink, Editing by Shri Navaratnam & Kim Coghill)